Small Area Estimation of Poverty

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6. Conclusions and suggestions for follow-up workIn this exercise of small area estimation of poverty wehave been able to provide statistically reliable povertymeasures for 2344 areas of Nepal by combining theresults of NLSS III and Census 2011. When statisticalreliability is doubtful, similar VDCs have beencombined to generate reliable poverty estimates forthe select aggregate of VDCs inside a given ilaka. Theestimates are more disaggregated than the ilaka level(967 areas) estimates done in 2006. In addition, for allthe 3972 of VDCs / Municipalities considered mostuseful for development purposes confidence intervalsof poverty estimates are provided.Poverty both in proportion and the absolute numberof poor is high in the hilly areas of Far West and partsof Mid West. The percentage of poor varies fromnegligible in parts of Kathmandu to 75 percent in partsof Gorkha district. A comparison with the poverty mapof 2006 shows that though prosperity is spreading inNepal, it has a hard time moving West and climbingHills. Poverty concentration in the East and Centralhas declined while it increased in the rest. Nearly halfthe small areas have poverty higher than the nationalaverage of 25.2 percent and contain two-thirds of thepoor in Nepal.The character of the spatial distribution of povertyin Nepal is not new but the estimates at 2344 smallareas along with their standard errors should help inbetter design of development interventions. While itis straight forward to target development activities inareas with extreme poverty, in areas where povertyis not distinctly different, randomized experimentdesigns can be used to pick appropriate interventionsthat are most effective.The poverty maps could usefully be expanded toother indicators of welfare such as nutrition and foodsecurity like in 2006. Detailed spatial distribution ofpoverty offers an opportunity to explore further thecauses of poverty trends in Nepal. When combinedwith the spatial distribution of correlates of povertysuch as access to roads, schools and health facilities,and other variable of economic geography, one canfurther our understanding of the persistence of pocketsof poverty in Nepal.NEPAL Small Area Estimation of Poverty, 2011, Summary and Major Findings 15
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Page 2: NEPALSmall Area Estimation of Pover
Page 5 and 6: Table of ContentsPrefaceiiiTable of
Page 7 and 8: The character of the spatial distri
Page 9 and 10: 2. Methodology2.1 Small-area estima
Page 11 and 12: 3. Data sources and description3.1
Page 13 and 14: eason for this is to improve usabil
Page 15 and 16: Observed poverty rates NLSS IIIPred
Page 17 and 18: Figure 2: Poverty incidence on dist
Page 19 and 20: Figure 6- Poverty incidence on targ
Page 21: 5.2 Breakdown of standard errorsHow
Page 25 and 26: A 1: SAE Poverty Rates at the Distr
Page 27 and 28: A 2: SAE Poverty Rates at the Targe
Page 29 and 30: A 3: SAE Poverty Rates at the Ilaka
Page 49 and 50: A 4: SAE Poverty Rates at the “Ta
Page 51 and 52: A 4: SAE Poverty Rates at the “Ta
Page 53: A 5 : SAE of target areas( having n

Small Area Estimation of Poverty

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